In light of the dramatic fall in commodity prices, Marathon Oil (NYSE: MRO) has announced an immediate capital spending reduction of at least $500 million relative to its previously communicated 2020 capital spending budget of $2.4 billion. The revised capital spending budget of $1.9 billion or less represents an approximate 30% reduction in comparison to actual 2019 capital spending.

Specifically, the Company will take the following steps to reduce its 2020 budget:

• Suspend further Resource Play Exploration (REx) drilling and leasing activity, driving a material reduction to the original $200 million REx budget for 2020;
• Immediately suspend all operated drilling and completion activity in Oklahoma, where the Company is currently running three rigs and one frac crew;
• Meaningfully reduce operated drilling and completion activity in the Northern Delaware, where the Company is currently running four rigs and one frac crew;
• Optimize development programs in the Eagle Ford and Bakken, where the Company is currently running eight rigs and three frac crews.

"In response to the recent commodity price volatility from simultaneous supply and demand shocks, we're taking swift and decisive action to defend our cash flow generation, protect our balance sheet, and fund our dividend," said Marathon Oil Chairman, President, and CEO Lee Tillman. "We believe our foundational work is already in place with a high-quality multi-basin portfolio that affords us the flexibility that we're exercising today. Our balance sheet reflects a conservative leverage profile and significant liquidity. And, at every level of the Company we continue to strive to relentlessly drive down our cash flow breakeven, while operating safely and responsibly. This framework has served us well, and it positions us to navigate a challenging oil price environment ahead."

Marathon Oil maintains a strong financial foundation, ending 2019 with approximately $3.9 billion of liquidity and no nea- term debt maturities. Liquidity at year end 2019 consisted of $858 million of cash and cash equivalents and an untapped $3 billion credit facility. The unsecured credit facility is backed by 18 leading global financial institutions, and the maturity date was recently extended to May 2023. Marathon Oil is rated as investment grade at all three major rating agencies and has no significant debt maturities until November of 2022.

The Company will continue to monitor commodity price developments and retains flexibility to adjust capital spending plans further in response to a dynamic environment, with minimal long-term commitments for services and materials. The Company plans to provide a more comprehensive update to its revised 2020 business plan as part of its first quarter earnings release in May.